September 2009

September 25, 2009

Last week we reported Barack Obama's decision to impose 35% tariffs on imported Chinese tyres. The Obama administration's protectionist instincts are the subject of a damning editorial in The Economist magazine:

"The tyre decision needs to be set into the context of a string of ominously protectionist policies which started within weeks of the inauguration with a nasty set of “Buy America” provisions for public-works contracts. The president watered these down a bit, but was not brave enough to veto. Next, the president stayed silent as Congress shut down a project that was meant to lead to the opening of the border to Mexican trucks, something promised in the NAFTA agreement of 1994. Besides these sins of commission sit the sins of omission: the president has done nothing at all to advance the three free-trade packages that are pending in Congress, with Colombia, Panama and South Korea, three solid American allies who deserve much better. And much more serious than that, because it affects the whole world, is his failure to put anything worthwhile on the table to help revive the moribund Doha round of trade talks. Mr Bush’s tariffs, like the Reagan-era export restraints on Japanese cars and semiconductors, came from a president who was fundamentally committed to free trade. Mr Obama’s, it seems, do not."

September 24, 2009

In a major speech to the United Nations yesterday Barack Obama set out the ways in which American foreign policy had already changed since he became President:

Closing Guantanomo: "On my first day in office, I prohibited -- without exception or equivocation -- the use of torture by the United States of America. I ordered the prison at Guantanamo Bay closed, and we are doing the hard work of forging a framework to combat extremism within the rule of law."

Withdrawing from Iraq: 'We have removed American combat brigades from Iraqi cities, and set a deadline of next August to remove all our combat brigades from Iraqi territory."

Reductions in America's nuclear arsenal: "I have outlined a comprehensive agenda to seek the goal of a world without nuclear weapons."

A new effort at Middle East Peace: "I appointed a Special Envoy for Middle East Peace, and America has worked steadily and aggressively to advance the cause of two states -- Israel and Palestine -- in which peace and security take root, and the rights of both Israelis and Palestinians are respected."

Global leadership against climate change: "To confront climate change, we have invested $80 billion in clean energy. We have substantially increased our fuel-efficiency standards. We have provided new incentives for conservation, launched an energy partnership across the Americas, and moved from a bystander to a leader in international climate negotiations."

Action against the global recession: "We worked with the G20 nations to forge a coordinated international response of over $2 trillion in stimulus to bring the global economy back from the brink."

A new respect for the United Nations: "We have paid our bills. We have joined the Human Rights Council. (Applause.) We have signed the Convention of the Rights of Persons with Disabilities. We have fully embraced the Millennium Development Goals. And we address our priorities here, in this institution -- for instance, through the Security Council meeting that I will chair tomorrow on nuclear non-proliferation and disarmament, and through the issues that I will discuss today."

President Obama gave the speech on the day when the New York Times reported that the White House was reconsidering its strategy in Afghanistan. Vice President Joe Biden disagrees with US generals on the ground that more troops are needed. "Rather than trying to protect the Afghan population from the Taliban," the New York Times suggested, "American forces would concentrate on strikes against Qaeda cells, primarily in Pakistan, using special forces, Predator missile attacks and other surgical tactics."

It is not clear if the consideration of alternatives represents a real change of heart since Obama promised an Iraq-style troops surge or is a necessary exercise to reassure Democrats that all alternative options have been explored.

September 17, 2009

The Czech government has confirmed that America has abandoned George W Bush's commitment to build a missile defence system in central Europe.

President Bush had said the system was an essential protection against rogue states attacking Europe with a nuclear-armed missile.

Critics of the Obama administration are suggesting that persistent Russian opposition to the plan is the explanation. Other theories include the enormous expense at a time when the American budget deficit is growing sharply and also continuing concerns that a missile defence system - first proposed by President Reagan in the early 1980s - is technologically too difficult. Some believe that a dirty nuclear bomb - smuggled into a major urban centre in a 'suitcase' - is much more likely and a missile defence system offers no protection against it.

Obama administration officials are claiming that the policy shift reflects their belief that Iran's long-range missile plans are less advanced than originally predicted.

Nile Gardiner of Washington's Heritage Foundation is in no doubt that the White House has been intimidated by the Kremlin:

"This is bad news for all who care about the US commitment to the transatlantic alliance and the defence of Europe as well as the United States. It represents the appalling appeasement of Russian aggression and a willingness to sacrifice American allies on the altar of political expediency. A deal with the Russians to cancel missile defence installations sends a clear message that even Washington can be intimidated by the Russian bear."

Last November Russia moved its own ballistic missiles to Kaliningrad between Nato member states Lithuania and Poland. Russian President Dmitry Medvedev had threatened to "neutralise - if necessary - the [US] anti-missile system".

Last week Russia shut the door to tougher sanctions against Iran. It may be that this U-turn reflects a hope by Washington to trade the missile defence system for Russia pressurising Tehran. Time will tell.

"We see the benefits of the "reset" with Russia as Lavrov shuts the door on real sanctions. While Obama is pressuring Israel on settlements and reaching out to Damscus, we learn that Syria has more nuclear sites. Hariri has given up on trying to form a government in Lebanon. And Iran has apparently stepped up its support for killing Americans in Afghanistan."

Last week China accused Barack Obama of "rampant protectionism" after the American President imposed a new duty of 35% on Chinese tyre imports. US labour unions - a key part of the Democratic Party's coalition - had sought the tariffs.

Writing for The Financial Times, Charles Freeman accuses the Obama administration of "calculated cynicism" in its new protectionist attitude toward China:

"The levying of new tariffs on imports of Chinese tyres is not particularly heartening. To be sure, China is no angel in international trade matters. As everywhere, China’s domestic politics complicate Beijing’s economic policies and bedevil efforts of international negotiators to ensure a level playing field in cross-border trade. But this particular White House decision, taken through a process that is widely despised in China as uniquely discriminatory against that country, is no mere slap on the wrist for run-of-the-mill Chinese perfidies. This decision provides fodder for nationalist interests in China that will not just push for tit-for-tat retaliation against US economic interests, but play into a broader trend within China to roll back market-opening reforms. That could result in a back-and-forth battle of retaliatory trade measures which, given the importance of US-China trade relations to global commerce, will provide cheer to only the most parochial of interests worldwide."

September 04, 2009

Critics of President Bush's invasion of Iraq often complained that the necessary war in Afghanistan was being starved of resources because of the decision to topple Saddam Hussein. AmericaInTheWorld has always supported the Iraq war but it is difficult to argue with the contention that the campaign in Afghanistan was neglected. Barack Obama vowed to correct that while a candidate for the White House and has already committed another 21,000 US troops to the country.

He will soon receive another request for more troops from his commander in the field, General Stanley McChrystal, but that request will come at a time of mounting opposition to the campaign among US voters. A recent Washington Post opinion poll found 51% of Americans believing that the war is not worth fighting. Among the President's own Democratic party opposition is even higher, at 70%. Nearly twice as many voters want troop numbers reduced as support extra troops.

All this comes at a terrible time for Obama. The politician who could do no wrong is facing difficulties on multiple fronts. His flagship domestic reform - on healthcare - is unpopular. Earlier today unemployment hit at 26-year high of 9.7%. The budget deficit is exceeding the Obama White House's own forecasts. His net approval rating is down to 11.7%.